Stealing from shareholders.(The Divine Right of Capital: Dethroning the Corporate Aristocracy)

The Divine Right of Capital: Dethroning the Corporate Aristocracy By Marjorie Kelly Berrett-Koehler, 200 pages, $24.95

The Divine Right of Capital accepts supply and demand, competition, profit, self-interest, and the market. The arguments are phrased in the language of Jefferson, not Marx. The word "socialist" is never used. Yet that's exactly what this book is.

Marjorie Kelly begins by complaining that, in most companies, shareholders are simply people who bought stock. They didn't found the firm, or do anything, yet the whole enterprise is run in their interest.

Is that wrong? Think of the buyer of an old apartment house. He hasn't created new housing; he's part of a chain of investors who allowed the creator to recoup his money and go away. The ownership rights pass from hand to hand in perpetuity.

Imagine a different rule. Say the building's ownership reverted after 30 years to the tenants. Under such an arrangement it might still be possible to entice the owner to build the building, but he would have to collect much higher rents, knowing he would lose the building at year 30. If he were enticed to build with perpetual rights and his building was then expropriated at year 30 in the name of tenant rights, that would simply be theft.

Yet that is what Marjorie Kelly proposes for American corporations: Change the rules and steal companies from shareholders. That's not how she puts it, of course. She suggests that a shareholder's rights should be pronounced used up after a certain time, with workers inheriting the shareholder's assets.

Kelly gripes that stockowners are just aristocrats who want "to be free from labor." She maintains that "shareholders serve about as many functions as an eighteenth-century French marquess, which is to say almost none. Except collecting their own income.... It is inaccurate to speak of shareholders as investors, for more truthfully they are extractors."